Sales estimations in the book industry – comparing management predictions with market response models in the children’s book market

ABSTRACT

Estimating the demand of books is an important business-planning task for publishing companies. This study identifies, quantifies, and generalizes the sales drivers of children’s and young adult literature books and investigates whether quantitative prediction models improve prerelease sales predictions. We compare the model-based predictions with prerelease management sales predictions of a subsample provided by a large German publisher. Based on a sample of 542 titles that were published in Germany, we examine (a) the relevant drivers (elasticities) for economic success and (b) analyze the prediction performance of the models using two specifications of multiplicative market response models for this highly relevant market. The quantitative model approach outperforms management heuristics, reducing the prediction error by up to 45%. We further highlight the practical feasibility of simple market response models.

KEYWORDS:

• Book industry
• sales response models
• sales forecasts

Acknowledgments

We would like to thank Ella Schellmoser for her support in compiling the dataset.

Notes

1. Printing costs are a major concern in the German book market whose annual value is worth more than nine billion Euro (Börsenverein des deutschen Buchhandels, 2017). In comparison, the German book market has six times the turnover of the German music industry (Bundesverband Musikindustrie, 2014).

Additional information

Funding

This work was supported by the Deutsche Forschungsgemeinschaft [DFG-FG 1452].

Notes on contributors

Cord Otten

Cord Otten is doctoral candidate, University of Hamburg, Institute for Marketing, Moorweidenstr. 18, D-20148 Hamburg, Germany and Kühne Logistics University, Großer Grasbrook 17, D-20457 Hamburg, Germany, e-mail: [email protected]

Michel Clement

Michel Clement is Professor of Marketing and Media, University of Hamburg, Institute for Marketing, Moorweidenstr. 18, D-20148 Hamburg, Germany, e-mail: [email protected] (corresponding author)

Dominik Stehr

Dominik Stehr is research assistant, University of Hamburg, Institute for Marketing, Moorweidenstr. 18, D-20148 Hamburg, Germany, e-mail: [email protected]